Oil Prices Fall Back Despite Bullish Predictions

Hamilton Nwosa
Writer
Oil Falls Below $90 As Markets Shuffle Back From Supply Jitters

Ad

The Need for Nigeria to Lead Africa in the Emerging Age of Artificial Intelligence

By Sonny Iroche Introduction: Standing at the Threshold of the Fourth Industrial Revolution The world is on the cusp of a seismic transformation driven by Artificial Intelligence (AI). Just as steam engines powered the first Industrial Revolution, electricity and mechanization the second, and digital computing the third, AI is the defining force of the Fourth…

Why Wike Should Resign or Be Sacked: A Call to Organized Civil Society in Nigeria to Uphold Anti-corruption Standards with Consistency, By Frank Tietie

By Frank Tietie The revelations by Nigerian social crusader, investigative journalist, and activist Omoyele Sowore regarding the current Minister of the Federal Capital Territory, Nyiesome Wike, are serious and warrant the attention of all Nigerians who care about the integrity of the country. Sowore has alleged that Wike laundered funds and concealed the purchase of…

Dangote Refinery Slams PENGASSAN, Describes Order as ‘Economic Sabotage’

By Abiola Olawale In an escalating labor showdown, the Dangote Petroleum Refinery has fired back at the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), criticising the latter’s order on Saturday. This is as the refinery owned by Africa’s richest person, Alhaji Aliko Dangote described PENGASSAN's order to cut crude oil and gas…

Ad

Oil prices rallied this week on a set of bullish predictions from major investment banks but may have climbed too high too fast.

Oil prices

Rigs

futures

oil

refinery

Imports

Gasoline

Friday, January 21st, 2022

Leading investment banks issued their outlooks for 2022 this week, with both Goldman Sachs and Morgan Stanley expecting crude oil prices to hit $100 per barrel this year as oil inventories continue to ebb further and OPEC+ spare capacity falls. These reports drove ICE Brent past the $90 per barrel mark for the first time since 2014 this week, but the oil rally fizzled out by Friday as the priced-in geopolitical premium weakened. Despite recurring forecasts of an impending supply shortage, the coming weeks should see more crude on the market – Libya is already back and Ecuador will be getting there soon, too. The wide backwardation in futures markets, with the Brent M1-M12 spread at $8 per barrel, indicates that market fundamentals still point towards a drop from here, rather than a rally continuation. By Friday, global benchmark Brent traded around $88 per barrel, whilst WTI was trending at $85 per barrel.

US Congress Has Another Go at Big Oil. A US congressional committee invited top officials from four leading oil majors – ExxonMobil, Chevron, Shell, and BP – to testify in February about the industry’s role in climate change, the next phase of the House oversight committee’s inquiry into fossil fuel companies blocking action on climate change.

Med Supply Disrupted by Ceyhan Pipeline Explosion. A falling power pylon caused a force majeure halt of pumping along the Kirkuk-Ceyhan pipeline that brings Kurdish crude to the Mediterranean, though the impact was relatively brief as it took Turkey a day to bring back the pipeline to nameplate capacity.

Chesapeake Lining Up to Buy Chief Oil & Gas. US oil firm Chesapeake Energy (NASDAQ:CHK) is reportedly in advanced talks to buy privately-owned Chief Oil & Gas for some $2.4 billion, a little less than half a year after the former emerged from bankruptcy and began refocusing its operations around gas production.

China Fines Petrochina for Trade Irregularities. Along with punishing independent refiners’ for evading fuel tax, China’s authorities also fined the country’s leading oil firm Petrochina for irregular trade of crude oil totaling 180 million tonnes since 2006, in turn ‘facilitating the blind development of outdated production capacity at independents’.

Oil Majors Quit Myanmar. Oil majors TotalEnergies (NYSE:TTE) and Chevron (NYSE:CVX) decided to quit Myanmar following last year’s military coup, getting out of the Yadana offshore gas project off the country’s southwest coast without any financial compensation.

UK Rejects Application to build UK-France power cable. Despite UK power prices soaring over the course of 2021, UK Business Secretary Kwasi Kwaryeng rejected the application to build a 16GWh high-voltage subsea power cable that would bring electricity from France.

Still-torn Libya Aims to Maximize Output in 2022. With Libya just a couple of days out of the woods after a month-long supply disruption, the head of the country’s NOC Mustafa Sanallh claimed Libya aims for an average annual production level of 1.2 million b/d in 2022.

World’s First Hydrogen Tanker to Test Waters. The world’s first liquid hydrogen carrier is set to start loading for the maiden voyage that would take it from Australia to Japan, with the Kawasaki-built (TYO:7012) Suiso Frontier getting the hydrogen from brown coal produced in Australia.

Turkey to Ration Electricity to Industry after Iran Pipe Halt. Turkey’s Energy Ministry stated it would impose mandated power outages to large industrial plants after Iran cut gas flows to Ankara for up to 10 days on the back of a technical failure on the Iran-Turkey gas pipeline.

Britain Refrains from Carbon Market Intervention. Whilst the British government retains the right to cool the UK carbon market by adding free allowances as part of its cost-containment mechanism, London has repeatedly decided against it, despite UK carbon prices already trading at £78 per mtCO2eq. ($105/mt) and draining industry margins.

Argentina Oil Production Reaches 10-Year High. According to Argentinian national statistics, oil production in the country rose to a 10-year high of 560,000 b/d, the highest since October 2012, boosted primarily by higher Vaca Muerta output, up 64% year-on-year.

ExxonMobil-SABIC JV Adds to USGC Petchem Capacity. Teaming with Saudi Arabia’s petrochemical giant SABIC, US oil major ExxonMobil (NYSE:XOM) commissioned a 1.8 million tons per year polyethylene plant near Corpus Christi, TX, representing roughly 20% of future polyethylene capacity coming up in the US Gulf Coast.

Rio Tinto Faces Serbian Lithium Project Collapse. Serbia revoked metal firm Rio Tinto’s (NYSE:RIO) lithium exploration license for production in the Jadar region, largely due to mass protests that took over the Balkan country’s public consciousness.

Calcasieu Pass on the Brink of Commercial Start. The largest LNG project coming on stream this year in the US, Venture Global’s Calcasieu Pass has seen the amount of gas flowing to the terminal more than double to 88 mcf per day this week, indicating the liquefaction plant should start producing LNG anytime soon.

NB:Tom Kool wrote this article for Oilprice.com

Ad

Unlocking Opportunities in the Gulf of Guinea during UNGA80
X whatsapp